Self-employed Income Support Scheme (2nd Round)

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Self-employed workers who have been financially affected by COVID-19 can now apply for a second grant through the Self Employment Income Support Scheme (SEISS). Applications for the first SEISS grant closed on 13 July 2020 and a claim can now be made for the 2nd SEISS.  It is a standalone claim and there is no requirement for a claim to have been made on the initial grant.

Applications for the first SEISS grant closed on 13 July 2020 and a claim can now be made for the 2nd SEISS.  It is a standalone claim and there is no requirement for a claim to have been made on the initial grant.

This second and final taxable grant is worth 70% of average monthly trading profits, is paid out in a single instalment covering three months profits and is capped at £6,570. Eligibility and claims are completed online and can be found at https://www.gov.uk/guidance/claim-a-grant-through-the-self-employment-income-support-scheme – tax advisers are not permitted to make claims on behalf of clients.

There is no requirement to stop work in the period covered by the grant however, you must be able to demonstrate that business has been adversely affected by the pandemic on or after 14 July 2020. The final deadline for applying for this second grant is 19 October 2020.  Examples of how your business may have been affected include but are not limited to the following: –

  • Unable to work due to coronavirus (self-isolating/shielding/sickness)
  • The trade was adversely affected by coronavirus in the relevant period (temporarily stopping trading/contracts cancelled/generally less customers/additional expenditure due to adapting to COVID-19)

For a valid claim to be made you must have been trading in the tax year ended 5 April 2019 and you must have filed a 2019 Self-Assessment Tax Return by 23 April 2020.  In addition, you continued to trade in the year ended 5 April 2020 and you intend to carry on trading in this current tax year ending 5 April 2021.

It is important to note that if an invalid claim is made, the taxpayer should notify HM Revenue & Customs and repay the full amount received.  Eligibility for SEISS is based on the facts at the time and receipt of the claim and thus there is no requirement to apply hindsight.   Therefore, it is your intention at the time of claim that is the relevant point.

If person has been paid a grant to which they were not entitled and have not repaid it, they should notify HMRC within the notification period. There is a dedicated online system which should be used where possible to notify HMRC and make the repayment.  The notification period ends on the latest of:

  • 20 October 2020;
  • 90 days after receiving the grant

HMRC has the power to claw back incorrectly claimed amounts by levying a tax charge equal to 100% of the amount not repaid, plus interest.  In addition, failure to notify penalties maybe charged if the above deadlines are not met.  If an individual knew they were not eligible for a grant at the time of receipt, any failure to notify penalty will automatically be deemed to be deliberate and concealed and will result in a penalty of up to 100% of the amount not repaid at the end of the notification period with no claim for reasonable excuse.

If the claim was made in error but an individual was not aware they should not have made a claim additional penalties will not be charged provided the grant is repaid in full by 31 January 2022.   Given the current economic climate HMRC are likely to be looking at claims in an effort to claw back some of the losses incurred as a result of the pandemic so you should ensure that the claim is valid when making any such claim.

If you require more information or would like to get in touch for help and advice, give us a call on 0207 600 5667 or contact Karen McDonagh at Karen.McDonagh@elmanwall.co.uk

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